23/12/2008 - Warning over insurance deceptions
A trade body has warned that increasing numbers of applicants are running the risk of invalidating their insurance cover by lying when they take out a policy in a bid to get a better deal.
"Front end fraud" - under which customers lie on application forms or fail to disclose important information in a bid to keep their premiums down - is an increasing problem for insurance companies, according to the Association of British Insurers (ABI).
Not disclosing motoring convictions - such as speeding or drink-driving - was a common deception, it said.
One policyholder whose vehicle was stolen had his £7,000 claim rejected because he had failed to disclose two convictions for driving without insurance.
Other common practices include failing to mention previous claims made on policies, such as for car accidents or burglaries, and underestimating alcohol and tobacco consumption when applying for life insurance.
The ABI's director of general insurance and health, Nick Starling, said: "Honesty is the only policy. Cheating to get cheaper insurance puts your cover in jeopardy, with potentially disastrous consequences.
"Being truthful and shopping around will mean that your insurance delivers when you need it, and that you get the best possible deal."
Copyright © Press Association 2008
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